Got credit cards?
Chances are, you might have debt too.
In fact, the average credit card debt in the U.S. is $6,270, according to the most recent data from the Federal Reserve’s Survey of Consumer Finances.
Our mission is to help you stress less about money, so let’s show you how you can improve your credit score every single month.
Understanding Utilization
In order to understand how to “win” the system (the credit card bureaus), you must first learn about Credit Card Utilization.
Your credit utilization is a ratio that compares the balance on your credit card to your credit limit.
To improve your credit score, you have to keep your utilization under 30%.
If your line of credit is $1,000: Don't carry a balance more than 30% of that limit: in this case, $300.
Going over sends a flag to lenders & creditors that you're having trouble managing your money.
Don’t get this confused, you can spend up to 100% of your line of credit, but when it gets reported to the bureaus, make sure the balance is either paid off or less than 30% of the available line of credit.
Improve Every Month
Here's how you can improve your credit score every month.
Find out what date your credit cards get reported.
Note, this date may not always be the same date as your statement balance date.
If your credit card is reported 10th of every month, make sure the balance is either paid off or less than the previous month's balance.
The closer you get your credit utilization between 0-30% the higher your credit score will be. Make sure you log your progress!
There are other factors that affect your credit like credit age, payment history, and total accounts. But credit card utilization is a major factor.
We have free resources that will help you track your progress paying off those credit cards: right here.
Stay focused,
Chromabill Team